EXHIBIT 10.24
UROLOGY AMBULATORY SURGERY CENTER
SUBORDINATION, LIMITED GUARANTY
AND
INDEMNIFICATION AGREEMENT
BY AND BETWEEN AND AMONG
UROLOGY CENTER OF THE SOUTH, P.C.
("UCS")
AND
UROLOGY AMBULATORY SURGERY CENTER, L.L.C.
("UASC")
AND
BRIERBROOK PARTNERS, LLC
("LANDLORD")
DATED
26TH DAY OF JUNE, 2001
TABLE OF CONTENTS
ARTICLE 1. PURPOSE.........................................................................................2
Section 1.1 Purpose of Agreement............................................................................2
ARTICLE 2. DEFINITIONS.....................................................................................2
Section 2.1 Definitions.....................................................................................2
ARTICLE 3. SUBORDINATION AND PRIORITY......................................................................5
Section 3.1 Subordination of Claims and Obligations.........................................................5
Section 3.2 Priorities Regarding Lease Collateral...........................................................5
Section 3.3 Assignment of Collateral........................................................................6
ARTICLE 4. PAYMENTS........................................................................................6
Section 4.1 UCS as Trustee..................................................................................6
Section 4.2 Permissible Payments of Subordinated Claims.....................................................6
Section 4.3 Prepayments to UCS..............................................................................6
Section 4.4 Insurance Proceeds..............................................................................7
ARTICLE 5. DEFAULT.........................................................................................7
Section 5.1 Default Notice and Payment Blockage.............................................................7
Section 5.2 Acceleration and Enforcement of Subordinated Claims.............................................7
ARTICLE 6. BANKRUPTCY......................................................................................7
Section 6.1 Priority of Lease Claims and Obligations........................................................7
Section 6.2 No Adjudicated or Imputed Value.................................................................8
Section 6.3 Discharge of UCS................................................................................8
Section 6.4 Forbearance by UCS..............................................................................8
Section 6.5 Filing of Claims and Proofs of Claims...........................................................8
Section 6.6 Rights of UCS...................................................................................9
Section 6.7 Subrogation.....................................................................................9
ARTICLE 7. IMPAIRMENT OF SUBORDINATION.....................................................................9
Section 7.1 Subordination not Prejudiced, Affected or Impaired..............................................9
Section 7.2 Actions by Landlord............................................................................10
Section 7.3 Delay or Failure to Exercise Rights............................................................10
Section 7.4 Reinstatement of Lease Claims and Obligations..................................................11
ARTICLE 8. REPRESENTATIONS, WARRANTIES AND COVENANTS......................................................11
Section 8.1 UASC and UCS...................................................................................11
Section 8.2 UASC's Authority...............................................................................11
Section 8.3 UCS's Authority................................................................................11
Section 8.4 Restrictions as to Security for Subordinated Claims............................................11
Section 8.5 Restrictions Relating to the Lease and Lease Collateral........................................11
Section 8.6 Amendment of Organizational Documents and Management Agreement.................................12
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Section 8.7 Assignment of Subordinated Claims and Obligations..............................................12
ARTICLE 9. LEASE DEFAULT AND ACCELERATION.................................................................12
Section 9.1 Right to Cure..................................................................................12
Section 9.2 Acceleration Notice............................................................................12
Section 9.3 Ownership of Subordinated Obligations..........................................................12
ARTICLE 10. SPECIAL USE RESTRICTIONS AND INDEMNIFICATION...................................................12
Section 10.1 Agreement to Observe........................................................................12
Section 10.2 Indemnification.............................................................................13
ARTICLE 11. LIMITED GUARANTY...............................................................................13
Section 11.1 Guaranty of Member..........................................................................13
Section 11.2 Limitation on Guaranty......................................................................14
ARTICLE 12. MISCELLANEOUS..................................................................................15
Section 12.1 Specific Enforcement........................................................................15
Section 12.2 Powers and Authorities Irrevocable; No Duty.................................................15
Section 12.3 Enforceability..............................................................................15
Section 12.4 Complete Agreement; Inconsistency; Modification; Waiver.....................................16
Section 12.5 Headings....................................................................................16
Section 12.6 Governing Law; Consent to Jurisdiction......................................................16
Section 12.7 Waiver of Right to Trial by Jury............................................................16
Section 12.8 Continuing and Irrevocable Agreement; Acceptance............................................16
Section 12.9 Counterparts................................................................................16
Section 12.10 Notices.....................................................................................16
Exhibit A ASC Lease
Exhibit B Corporate Suite Lease
Exhibit C Clinic Lease
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UROLOGY AMBULATORY SURGERY CENTER, L.L.C.
SUBORDINATION,
LIMITED GUARANTY
AND
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as
of this 26th day of June, 2001 by, between and among BRIERBROOK PARTNERS, LLC, a
Tennessee limited liability company, ("Landlord"), UROLOGY CENTER OF THE SOUTH,
P.C., a Tennessee professional corporation, ("UCS"), and UROLOGY AMBULATORY
SURGERY CENTER, L.L.C., a Tennessee limited liability company ("UASC").
RECITALS
A. Landlord has agreed to enter into a certain Lease Agreement
with UASC (the "ASC Lease"), attached hereto as EXHIBIT A, pursuant to which the
Landlord has agreed to lease to UASC the real property and improvements as set
forth and described in the ASC Lease (the "ASC Suite").
B. The obligations of UASC to Landlord are secured by liens on
and security interests in the collateral described in Article 16 of the ASC
Lease (the "ASC Lease Collateral").
C. Landlord has agreed to enter into a certain Lease Agreement
with UCS (the "Corporate Suite Lease"), attached hereto as EXHIBIT B, pursuant
to which the Landlord has agreed to lease to UCS the real property and
improvements as set forth and described in the Lease (the "Corporate Suite").
D. The obligations of UCS to Landlord are secured by liens on
and security interests in the collateral described in Article 16 of the
Corporate Suite Lease (the "Corporate Suite Lease Collateral").
E. Landlord has agreed to enter into a certain Lease Agreement
with UCS (the "Clinic Lease"), attached hereto as EXHIBIT C, pursuant to which
the Landlord has agreed to lease to UCS the real property and improvements as
set forth and described in the Lease (the "Clinic Suite").
F. The obligations of UCS to Landlord are secured by liens on
and security interests in the collateral described in Article 16 of the Clinic
Lease (the "Clinic Lease Collateral"). Collectively, the ASC Lease, the
Corporate Suite Lease, and the Clinic Lease are referred to herein as the
"Leases".
G. To induce Landlord to enter into the ASC Lease, Ambulatory
Operations, Inc. ("AOI"), a Tennessee corporation, as a member of UASC executed
a Subordination Agreement (the "AOI Subordination Agreement") pursuant to which
AOI subordinated its rights to income and other distributions from UASC to the
obligations of UASC for payment and performance of UASC's obligations under the
ASC
H. To induce Landlord to enter into the ASC Lease, Methodist
Healthcare, a Tennessee not for profit corporation ("Methodist"), as owner of
AOI, executed a Limited Guaranty (the "Methodist Limited Guaranty") pursuant to
which Methodist agrees to transfer funds to AOI, in accordance with its
ownership percentage of UASC, to pay lease payments, subject to certain other
limitations as set forth in the Methodist Limited Guaranty.
I. To induce Landlord to enter into the ASC Lease, LeBonheur
Ambulatory Services, Inc., ("LeBonheurr") a Tennessee corporation and an
affiliate of Methodist, who is the manager of UASC, has executed a Subordination
Agreement (the "LeBonheur Subordination Agreement") pursuant to which LeBonheur
subordinated its rights to its Management Fee and certain other income and
distributions from UASC to the obligations of UASC for payment and performance
of UASC's obligations under the ASC Lease
J. UCS, in addition to being a Tenant under the Clinic Lease
and the Office Suite Lease, is a member of UASC and as a member of UASC holds
ownership interests in the income and profits and certain rights to
distributions from UASC.
K. To induce Landlord to enter into the Leases, each of the
Physicians who are members of UCS have executed a Subordination, Non-Compete,
Limited Guaranty and Indemnification Agreement (the "Physician Agreements").
L. To induce Landlord to enter into the Leases, UCS and UASC
have executed this Agreement.
M. The Landlord, UASC and UCS, desire to confirm as among
themselves the rights and priorities with respect to certain matters arising in
connection with the Leases and the Subordinated Obligations and Subordinated
Claims (as defined herein), which are of mutual importance to them, without
otherwise affecting their respective rights under the Leases or under the other
agreements, instruments, and other writings executed and delivered in connection
therewith, all as more fully set forth herein.
N. Further, to induce Landlord to enter into the Leases, UCS
has agreed to enter into the Indemnification, and Guaranty obligations as set
forth herein.
Now Therefore, in consideration of the premises and in
consideration of the execution and delivery of the Leases, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, UCS and UASC, for themselves and for each other present and future
holder of any Subordinated Obligation or Subordinated Claim, intending to be
legally bound, hereby agree for the direct and legally enforceable benefit of
Landlord, each other Landlord and each other present and future holder of any
Lease Obligation or Lease Claim as follows:
ARTICLE 1. PURPOSE
SECTION 1.1 PURPOSE OF AGREEMENT.
IT IS THE PURPOSE OF THIS AGREEMENT TO PROVIDE THAT PAYMENTS
OR DISTRIBUTIONS THAT MAY OTHERWISE BE DUE TO UCS FROM UASC WILL BE SUBORDINATE
AND JUNIOR TO THE RIGHT OF THE LANDLORD TO PAYMENT UNDER THE ASC LEASE.
PROVIDED, HOWEVER, THAT THIS AGREEMENT SHALL NOT PRECLUDE PAYMENTS IN THE
ORDINARY COURSE OF BUSINESS (EXCLUSIVE OF PREPAYMENTS) FROM UASC TO UCS IF:
1.1.1 ALL LEASE OBLIGATIONS (AS HEREIN DEFINED), INCLUDING,
BUT NOT LIMITED TO ALL PAYMENTS OF RENT, THAT ARE CURRENTLY DUE AND
PAYABLE HAVE BEEN PAID OR PERFORMED BY UASC;
1.1.2 THE LANDLORD HAS NOT DELIVERED A DEFAULT NOTICE (AS
DEFINED IN SECTION 5.1) TO UCS; AND,
1.1.3 AT THE TIME OF SUCH PAYMENT, THERE IS NO BANKRUPTCY,
INSOLVENCY, OR LIQUIDATION PROCEEDING PENDING AGAINST UCS, UASC OR ANY
PARTY TO THE COLLATERAL AGREEMENTS; AND,
1.1.4 SUCH PAYMENT SHALL NOT RENDER UASC INSOLVENT OR UNABLE
TO MEET ITS LEASE OBLIGATIONS OR PAY THE LEASE CLAIMS IN CASH AS THEY
BECOME DUE.
ARTICLE 2. DEFINITIONS
SECTION 2.1 DEFINITIONS.
As used herein, the following terms (whether in singular or
plural usage) shall have the following meanings:
2.1.1 ASC LEASE is defined in the Preamble.
2.1.2 BANKRUPTCY CODE means Title 11 of the United States
Code.
2.1.3 BANKRUPTCY, INSOLVENCY OR LIQUIDATION PROCEEDING means
(a) any case commenced by or against UCS, UASC or any of the Physicians
under any chapter of the Bankruptcy
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Code, any other proceeding for the reorganization, recapitalization or
adjustment or marshalling of the assets or liabilities of the foregoing
parties, any receivership or assignment for the benefit of creditors
relating to the foregoing parties or any similar case or proceeding
relative to the foregoing parties or the creditors of any of them, as
such, in each case whether or not voluntary, (b) any liquidation,
dissolution, marshalling of assets or liabilities or other winding up
of or relating to the foregoing parties, in each case whether or not
voluntary and whether or not involving bankruptcy or insolvency, or (c)
any other proceeding of any type or nature in which Claims against the
foregoing parties are determined, proven or paid.
2.1.4 CLAIM is used as defined in the Bankruptcy Code,
whether or not, in the context in which it appears, a case under the
Bankruptcy Code is pending and shall also mean a claim by the Landlord
or any holder of a Lease Claim or Lease Obligation to performance of
any term, condition, covenant or agreement to be performed by UCS or
UASC under the Leases or UCS or any of the Physicians under any of the
Collateral Agreements (as herein defined).
2.1.5 CLINIC LEASE is defined in the Preamble.
2.1.6 COLLATERAL AGREEMENTS mean collectively this Agreement
and the Physician(s) Agreements.
2.1.7 CORPORATE SUITE LEASE is defined in the Preamble.
2.1.8 DEFAULT means (a) the failure to pay when due any
payment on any Lease Claim, or, (b) the failure of the UASC and UCS, as
Tenants, respectively, to promptly and faithfully perform, keep,
observe and discharge all of the terms, covenants, conditions,
agreements and provisions to be performed, kept, observed and
discharged by UASC and UCS, respectively, under the Leases; (c) the
failure of UCS to promptly and faithfully perform, keep, observe and
discharge all of the terms, covenants, conditions, agreements and
provisions to be performed, kept, observed and discharged by UCS under
this Agreement, (d) the failure of any Physician to promptly and
faithfully perform, keep, observe and discharge all of the terms,
covenants, conditions, agreements and provisions to be performed, kept,
observed and discharged by the Physician under the Physician
Agreements: or (e) any event that does or, with the giving of any
notice or the lapse of any period of time (or both), would constitute a
Default or an Event of Default under (and as defined in) the Leases or
under this Agreement.
2.1.9 DISCHARGE OF THE LEASE OBLIGATIONS means that UASC and
UCS, as Tenants, respectively under the Leases have promptly and
faithfully performed, kept, observed discharged and paid in full all of
the Lease Obligations to be performed or discharged by them
respectively.
2.1.10 HOLDER includes, in respect of any Obligation or Claim,
each person or entity which owns, is entitled to enforce, is entitled
to the benefit of or otherwise holds or owns such Obligation or Claim
and includes all persons and entities at any time receiving any
transfer of any interest in any Obligation or Claim or otherwise
succeeding to any interest in any Obligation or Claim.
2.1.11 INCLUDING is used illustratively, and not exhaustively
or by way of limitation, and means "including but not limited to."
2.1.12 LANDLORD is defined in the preamble to this Agreement
and includes any holder of a Lease Obligation or Lease Claim,
including, but not limited any assignee of the Leases.
2.1.13 LEASES are defined in the preamble to this Agreement.
2.1.14 LEASE COLLATERAL is defined in the preamble to this
Agreement.
2.1.15 LEASE CLAIMS means the sum of: (a) all present and
future Claims against UASC, UCS or any of the Physicians on account or
in respect to the Lease Obligations and other extensions of credit or
indebtedness at any time incurred under the Leases or the Collateral
Agreements, including any guaranty thereof, (b) all present and future
Claims at any time arising or secured, or purported to be secured,
under any instrument, conveyance or agreement delivered by such
parties, respectively, governing, securing or relating in any respect
to the Leases or the Collateral
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Agreements, (c) all present and future Claims in any manner based
thereon, arising therefrom or related thereto, in each case whether now
outstanding or at any time hereafter arising, and specifically includes
(without limitation) all Claims for fees, taxes, expense
reimbursements, indemnities and other amounts payable by any of the
foregoing parties, respectively under the Leases or the Collateral
Agreements or any other such instrument, conveyance or agreement and
all Post-Petition Claims in any Bankruptcy, Insolvency or Liquidation
Proceeding; and, (d) all other indebtedness at any time incurred by or
committed to any of the foregoing parties to the Landlord.
2.1.16 LEASE OBLIGATIONS means (a) the obligations of UASC, as
Tenant under the ASC Lease to promptly and faithfully perform, keep,
observe and discharge all of the terms, covenants, conditions,
agreements and provisions to be performed, kept, observed and
discharged by UASC under the ASC Lease including without limitation,
the payment by UASC, in full in cash of all of the amounts now or
hereafter owed under the ASC Lease, including without limitation the
Rent (as defined in the Lease), all other sums becoming due there
under, any damage or loss which Landlord may suffer by reason of the
breach by UASC of any covenant, agreement, or condition contained in
the ASC Lease (whether such amounts accrue before and after any
petition under any chapter of the Bankruptcy Code or any other law
affecting creditor's rights), Landlord fees, reasonable costs of
collection, and attorneys fees incurred in connection therewith, and
reasonable amounts expended to preserve, protect or maintain or
re-Lease any or all of the Premises and all reimbursement obligations
in respect thereof and advances made and other credit extended by the
Landlord; (b) the obligations of UCS to promptly and faithfully
perform, keep, observe and discharge all of the terms, covenants,
conditions, agreements and provisions to be performed, kept, observed
and discharged by UCS under the Corporate Suite Lease and the Clinic
Lease, and including without limitation, the payment by UCS in full in
cash of all of the amounts now or hereafter owed under the Corporate
Suite Lease and the Clinic Lease, including without limitation the Rent
(as defined in the Lease), all other sums becoming due there under, any
damage or loss which Landlord may suffer by reason of the breach by UCS
of any covenant, agreement, or condition contained in the Corporate
Suite Lease and the Clinic Lease (whether such amounts accrue before
and after any petition under any chapter of the Bankruptcy Code or any
other law affecting creditor's rights), Landlord fees, reasonable costs
of collection, and attorneys fees incurred in connection therewith, and
reasonable amounts expended to preserve, protect or maintain or
re-Lease the Premises and all reimbursement obligations in respect
thereof and advances made and other credit extended by the Landlord;
and (c) the obligations of UCS and the Physicians, each, to promptly
and faithfully perform, keep, observe and discharge all of the terms,
covenants, conditions, agreements and provisions to be performed, kept,
observed and discharged by each such party under the respective
Collateral Agreements to be performed by such parties and including
without limitation, the payment by such parties, as applicable, in full
in cash of all of the amounts now or hereafter owed under the
Collateral Agreements, including without limitation all sums becoming
due there under, any damage or loss which Landlord may suffer by reason
of the breach by any party of any covenant, agreement, or condition
contained in the Leases or the Collateral Agreements (whether such
amounts accrue before and after any petition under any chapter of the
Bankruptcy Code or any other law affecting creditor's rights), Landlord
fees, reasonable costs of collection, and attorneys fees incurred in
connection therewith, and reasonable amounts expended to preserve,
protect or maintain or re-Lease the Premises and all reimbursement
obligations in respect thereof and advances made and other credit
extended by the Landlord
2.1.17 METHODIST RELEASE DATE means the date three (3) years
from the Completion Date under the ASC Lease, provided that on or prior
to such date, an event of default has not occurred under the ASC Lease
requiring a payment by Methodist under the Methodist Limited Guaranty
prior to such date.
2.1.18 PHYSICIAN(S) means any shareholder of UCS who is a
holder of a Subordinated Obligation or Subordinated Claim and includes
any successor or assign of the Physician and any holder of a
Subordinated Obligation or Subordinated Claim by and through the
Physician.
2.1.19 POST-PETITION CLAIMS means any Claim with respect to
Leases or the Collateral Agreements accrued or computed for or as to
any period of time at any time after the commencement of any
Bankruptcy, Insolvency or Liquidation Proceeding set forth in or
applicable under such Agreements or agreement evidencing or governing
such
4
Agreements or for fees, expense reimbursements, indemnification or
other similar obligations accrued or determined for or as to any such
period of time in accordance with the provisions of such Agreements,
whether or not such Claim is allowed, allowable or enforceable in such
Bankruptcy, Insolvency or Liquidation Proceeding and even if such Claim
is not allowed or enforced therein.
2.1.20 SUBORDINATED CLAIMS means all present and future Claims
of UCS against UASC, its successors and assigns on account or in
respect of the Subordinated Obligations.
2.1.21 SUBORDINATED OBLIGATIONS means all present and future
obligations of UASC, its successors and assigns, to pay, reimburse,
distribute or otherwise deliver to UCS any fees, salary, income,
capital or expenses or funds of UASC of any nature whatsoever,
including, but not limited to present or future obligations arising
under, on account of, or in respect to: (a) UCS's ownership interest in
UASC (b) any employee, consulting, fee or other agreement of any nature
providing for payment to UCS for any Physician or other services
rendered by any employee or affiliate of UCS to UASC; (c) any and all
other extensions of credit or indebtedness at any time incurred or
arising between UASC and UCS or their successors and assigns; (d) any
other agreement between UASC and UCS, and (d) any and all obligations
owed by UASC to UCS in any manner whatsoever, whether arising from any
of the above or related thereto or otherwise, in each case whether now
outstanding or at any time hereafter arising and whether based on
contract or quasI-contract or founded in tort or arising by law or
otherwise, and specifically includes (without limitation) all
obligations UASC or any successor or assigns for to UCS for fees,
taxes, expense reimbursements, indemnities and other amounts,
obligations or liabilities of any nature whatsoever.
2.1.22 SUBSIDIARY means, with respect to any person or entity
at any time, any corporation, limited liability company, partnership,
association or other entity of which equity securities or other
ownership interests representing more than 50% of the equity or profit
interests or more than 50% of the ordinary voting power or, in the case
of a partnership, more than 50% of the general partnership interests
are, as of such date, owned, controlled or held by, or that is
otherwise controlled by, the parent or one or more subsidiaries of the
parent or by the parent and one or more of its subsidiaries.
2.1.23 SUBSIDIARY means any subsidiary of UCS or UASC.
ARTICLE 3. SUBORDINATION AND PRIORITY
SECTION 3.1 SUBORDINATION OF CLAIMS AND OBLIGATIONS.
UASC and UCS hereby covenant and agree that the Subordinated
Obligations and Subordinated Claims are and shall be postponed, subordinated and
junior in right of payment and performance to the prior payment in full in cash
and the performance of all Lease Obligations and Lease Claims, on the terms and
conditions herein set forth.
SECTION 3.2 PRIORITIES REGARDING LEASE COLLATERAL.
Notwithstanding anything to the contrary contained in or
arising from the Leases or the Collateral Agreements, or any other note,
agreement, lease, employee agreement, management agreement, instrument, or
document now or hereafter executed and delivered by the Landlord, UASC, UCS, or
any party to the Collateral Agreements, or any instrument or document executed
and delivered in connection therewith, or otherwise including any extensions,
renewals or forbearances thereof, any prior perfection of a security interest,
mortgage, deed of trust, lien, or the provisions of the Uniform Commercial Code,
or other law of any jurisdiction which is applicable, or the existence of any
present or future filing of financing statements under the Uniform Commercial
Code, or other law of any jurisdiction which is applicable, or other filings or
recordings under any other law of any jurisdiction which is applicable or in
which such filing or recording has been made, the priorities of the liens and
security interests of the Landlord in the Lease Collateral (including proceeds
of casualty and title insurance) securing the Lease Obligations and Lease
Claims, shall be senior and prior to any liens and security interest of UCS at
any time obtained on such collateral, and the liens and security interests of
UCS at any time obtained in such Lease Collateral shall be junior liens and
security interests subject to the liens and security interests of the Landlord.
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SECTION 3.3 ASSIGNMENT OF COLLATERAL.
Upon payment or other satisfaction in full of all obligations
secured by any collateral now or hereafter in the possession of any party
hereto, the then holder thereof will assign and deliver to the other parties
hereto holding a security interest in such collateral, as directed in writing by
such other parties, without representation, warranty, or recourse of any kind,
all such collateral then in the possession of such holder, and in so doing, such
holder shall thereupon be discharged from further responsibility with respect
thereto. So long as any obligations secured by any collateral remain unpaid to
the holder of such collateral, including, without limitation, a holder to which
any such obligations shall have been assigned, such holder may, subject to the
provisions of this Agreement, at all times in its sole discretion exercise any
and all powers and rights which it now has or may hereafter acquire with respect
thereto, without the necessity of obtaining any approval of any of the other
parties hereto; nor shall such holder of any collateral have any liability for
any action taken or failure to act with respect to any of such collateral held
by it beyond the exercise of reasonable care to assure the safe custody thereof.
ARTICLE 4. PAYMENTS
SECTION 4.1 UCS AS TRUSTEE.
If UCS shall receive any payment or distribution out of any of
the assets of UASC, whether or not arising out of or as a result of any event
described in SECTION 4.2 or any action or right of remedy exercised pursuant to
SECTION 5.2.2 of this Agreement, and such payment or distribution or the
retention thereof by UCS is not in accordance with the provisions of this
Agreement, then UCS shall hold such payment or distribution in trust as trustee
of an express trust, for the benefit of the Landlord, shall not commingle such
payment or distribution with its other assets, and shall promptly take all
action necessary to cause such payment or distribution to be allocated or paid
in accordance with this Agreement.
SECTION 4.2 PERMISSIBLE PAYMENTS OF SUBORDINATED CLAIMS.
For as long as the Leases are in effect and thereafter until
all Lease Obligations and Lease Claims have been paid in full in cash and/or
otherwise performed and discharged, UASC will not make or permit to be made, and
UCS will not demand, accept, receive or retain, any payment or distribution of
any kind or character, whether in cash, property, securities or otherwise, on
account or in respect of any Subordinated Obligation or Subordinated Claim,
except that:
4.2.1 Any payments of regularly scheduled installments or any
other payments required under the Subordinated Obligations, may be paid
if (and only if) at the time of such payment no Rent is due and payable
to Landlord and all Lease Obligations and Lease Claims then currently
due and owing have been paid in full in cash by UASC, as Tenant, or if
such Lease Obligations and Lease Claims do not require the payment of
cash, such Obligations and Claims have been discharged by UASC, as
Tenant, and no Default Notice (as herein defined) has been received by
UASC or UCS. Any payments made to UCS that do not meet the requirements
of the first sentence of this paragraph shall be held by UCS in trust
for the benefit of Landlord and promptly forwarded to Landlord for
application to the Lease Obligations and Lease Claims.
4.2.2 No such payment may be made at any time when any
Bankruptcy, Insolvency, or Liquidation Proceeding against UCS, UASC or
any party to the Collateral Agreements is pending. No such payment
shall be made that renders UASC insolvent or unable to meet its Lease
Obligations or pay the Lease Claims in cash as they become due.
SECTION 4.3 PREPAYMENTS TO UCS.
UCS will give Landlord written notice of (a) any prepayment of
a regularly scheduled payment; or, (b) receipt of any payment or distribution of
any kind or character, whether in cash, property, securities or otherwise made
by UASC in violation of SECTION 4.2, on the Subordinated Obligations or
Subordinated Claims or otherwise to UCS, and, within twenty (20) Business Days
after such notice is given, Landlord will notify UCS as to whether such
prepayment will be held by UCS in trust for the benefit of Landlord and promptly
forwarded to Landlord for application to the Lease Obligations and Lease Claims.
If Landlord fails to notify UCS that such prepayment is to be held in trust by
UCS and forwarded to the Landlord as set for in the preceding
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sentence, within such twenty (20) Business Day period, then such prepayment
shall be deemed to be a permitted payment, and shall be retained by UCS for its
own account.
SECTION 4.4 INSURANCE PROCEEDS.
With respect to the collection of any proceeds of any policy
of insurance covering any collateral, or any part thereof, the proceeds of which
are assigned to Landlord and/or UCS as additional collateral to secure the
obligations of UASC, as Tenant, under the Lease Obligations or the Subordinated
Obligations, the Landlord and UCS shall join in any instructions to the
insurance companies involved so that the proceeds of such insurance shall be
payable in full to Landlord and then, to the extent of any excess, to UCS or any
of the parties to the Collateral Agreements as their interest may appear.
ARTICLE 5. DEFAULT
SECTION 5.1 DEFAULT NOTICE AND PAYMENT BLOCKAGE.
Upon the occurrence and continuance of any Event of Default
(under and as defined in the Leases, or the Collateral Agreements or this
Agreement), and upon a declaration of an Event of Default by the Landlord with
written notice specifying the nature thereof (the "Default Notice") to UCS, then
unless and until said Event of Default shall be cured or waived to the sole
satisfaction of the Landlord, with written notice of such waiver or cure to be
given to UCS, (a) Landlord shall be entitled to thereafter receive payment and
performance in full of all Lease Obligations and Lease Claims before UCS shall
be entitled to receive any payment upon the Subordinated Obligations or
otherwise, and (b) after all Lease Obligations have been paid in full and
performed and discharged in full, UCS shall be entitled to receive full payment
on the Subordinated Obligations.
SECTION 5.2 ACCELERATION AND ENFORCEMENT OF SUBORDINATED CLAIMS.
Until all Lease Obligations and Lease Claims have been
discharged, performed and paid in full in cash, UCS will not (a) demand,
accelerate, bring suit to collect or otherwise exercise or enforce any right or
remedy in respect of any Subordinated Claim or commence or prosecute any action
or proceeding thereon, (b) commence any Bankruptcy, Insolvency or Liquidation
Proceeding or join with any creditor in commencing any Bankruptcy, Insolvency or
Liquidation Proceeding, or appear in any Bankruptcy, Insolvency or Liquidation
Proceeding commenced by any other creditor in support of the commencement or
continuation thereof, or (c) otherwise exercise or enforce any right or remedy
in respect of any Subordinated Claim, including any right or remedy that
otherwise might be available to it in any Bankruptcy, Insolvency or Liquidation
Proceeding, unless:
5.2.1 The Landlord has received written notice thereof,
stating the action to be taken and the grounds therefor, and at least
180 days have elapsed since the date such written notice was received
by the Landlord.
5.2.2 Notwithstanding the foregoing, nothing in this SECTION
5.2.2 shall limit the rights of UCS to prove and establish its
Subordinated Claims in any such Bankruptcy, Insolvency, or Liquidation
Proceeding.
ARTICLE 6. BANKRUPTCY
SECTION 6.1 PRIORITY OF LEASE CLAIMS AND OBLIGATIONS.
In the event of any Bankruptcy, Insolvency or Liquidation
Proceeding and any receivership, liquidation, readjustment, merger,
consolidation, amalgamation, reorganization, arrangement, or other similar
proceedings in connection therewith, relative to UASC or any of the parties to
the Collateral Agreements, respectively, or to their property, and in the event
of any proceedings for voluntary liquidation, dissolution, or other winding up
of UASC or any of the parties to the Collateral Agreements, respectively,
whether or not involving insolvency or bankruptcy:
6.1.1 All Lease Claims (including all Post-Petition Claims)
shall be discharged, performed and paid in full in cash before UCS
shall be entitled to receive any payment, performance or distribution
of any kind or character, whether in cash, property, securities or
otherwise, on account or in respect of any Subordinated Claim in such
Bankruptcy, Insolvency or Liquidation Proceeding.
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6.1.2 The holders of Lease Claims after discharge of the Lease
Claims shall be entitled to receive each payment and distribution of
any kind or character, whether in cash, property, securities or
otherwise (including any such payment or distribution which may become
payable or deliverable by reason of any other Claim being subordinated
to any Subordinated Claim), that may become payable or deliverable on
account or in respect of any Subordinated Claim, for application to the
payment of Lease Claims of such holders (including all Post-Petition
Claims), until all holders of Lease Claims have received performance
and payment in full in cash of all Lease Claims (including all
Post-Petition Claims). All such payments and distributions shall be
delivered by the debtor, trustee, receiver, disbursing agent, or other
person making such payment or distribution in such Bankruptcy,
Insolvency, or Liquidation Proceeding directly to the Landlord for the
benefit of such holders of Lease Claims.
SECTION 6.2 NO ADJUDICATED OR IMPUTED VALUE.
Except as otherwise agreed in writing by the Landlord, no
payment or distribution consisting of any property or securities other than cash
shall be deemed applied to the payment of Lease Claims at any adjudicated or
imputed value.
SECTION 6.3 DISCHARGE OF UCS.
No discharge of the liability of the debtor in such
Bankruptcy, Insolvency or Liquidation Proceeding shall, as against UCS as a
creditor, constitute performance and/or payment of the Lease Claims or shall in
any respect affect or impair the right of the holders of Lease Claims to receive
each performance, payment or distribution on account or in respect of
Subordinated Claims and to apply such payment or distribution to pay the Lease
Claims (including all Post-Petition Claims accrued or incurred through the date
on which cash proceeds have been received by the holders of Lease Claims in an
amount sufficient to pay all Lease Claims in full), until cash proceeds have
been received and applied to the payment of and performance of Lease Claims in
an amount sufficient to perform, discharge and pay, in full and in cash, all
Lease Claims (including all Post-Petition Claims accrued or incurred through the
date on which cash proceeds in such amount are received).
SECTION 6.4 FORBEARANCE BY UCS.
UCS, as a creditor, shall not, in such Bankruptcy, Insolvency
or Liquidation Proceeding, (a) assert, or request relief predicated on the
assertion that, or join with any creditor or the debtor or any trustee or
representative in asserting or requesting relief predicated on the assertion
that, any of the Lease Obligations and Claims is not enforceable, should be
equitably subordinated, is subject to avoidance on any ground or is not secured
by lawfully granted, continuously perfected and nonavoidable security interests
in the Lease Collateral, (b) oppose or otherwise contest, or join with any
creditor or the debtor or any trustee or representative in opposing or otherwise
contesting any request by Landlord for relief from any automatic stay or from
any other form of order or restraint for the purpose of permitting such Landlord
to foreclose upon or otherwise enforce any or all of its security interests and
liens upon any Lease Collateral or (c) seek, or join with any creditor or the
debtor or any trustee or representative in seeking, substantive consolidation of
the estate of the debtor with the assets, liabilities or estate of its parent
company or any of its subsidiaries or any other person or entity.
SECTION 6.5 FILING OF CLAIMS AND PROOFS OF CLAIMS.
UCS, as a creditor, shall file, in appropriate form, all
claims, and proofs of claim in respect of such Subordinated Claims whenever the
filing of claims is required or permitted by law upon any of the Subordinated
Claims. If UCS does not file any such claim or proof of claim promptly upon the
request of Landlord, then the Landlord, and its agents, is hereby irrevocably
authorized and empowered (but shall not be obligated), as attorney-in-fact for
UCS with full power of substitution, either to file such claim or proof thereof
in the name of UCS or, at the option of Landlord, to assign such claim to the
Landlord, for the benefit of the holders of Lease Claims as their interest may
appear in accordance with the provisions of this Agreement, or to their nominee,
and cause such claim or proof thereof to be filed. Landlord will provide UCS
with copies of any documents filed naming and claiming through UCS.
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SECTION 6.6 RIGHTS OF UCS.
Except as set forth herein, UCS, as a creditor, shall retain
the right to vote and otherwise act in any such proceeding, including, without
limitation, the right to file claims in its own behalf and to vote to accept or
reject any plan or partial or complete liquidation, reorganization, arrangement,
composition, or extension.
SECTION 6.7 SUBROGATION.
In any Bankruptcy, Insolvency or Liquidation Proceeding or any
other action or proceeding, subject to the prior performance and payment in full
and in cash of any and all Lease Obligations and Lease Claims (including all
Post-Petition Claims), UCS, as a creditor, shall have and may enforce any and
all rights of subrogation accorded by law in respect of any payment or
distribution on account of any Subordinated Claim that is applied to the payment
of any Lease Claim pursuant to the provisions of this Agreement. For such
purposes:
6.7.1 No right of subrogation shall be available to or may be
enforced by UCS, unless and until all Lease Claims (including all
Post-Petition Claims) have been performed and discharged in full and
paid in full in cash.
6.7.2 No holder of any Lease Obligations or Lease Claim makes
any representation or warranty, or shall otherwise have any
responsibility, as to whether any such right of subrogation is accorded
or available to UCS or is enforceable by UCS in any particular
circumstance.
6.7.3 No holder of any Lease Obligation or Lease Claim shall
have any duty to UCS to ensure, perfect, protect, enforce or maintain
any right of subrogation that might otherwise be accorded or available
to or enforceable by UCS. The subordination provided herein and the
rights of the holders of Lease Claims hereunder shall remain fully
enforceable on the terms set forth herein, regardless of any act,
omission or circumstance (whether or not attributable to any holder of
any Lease Claim and whether or not wrongful) which does or might in any
manner or in any respect destroy, limit, reduce, affect or impair any
right of subrogation otherwise accorded or available to or enforceable
by UCS. Each holder of any Lease Obligations or Lease Claim shall
remain utterly free to take or fail to take any and all actions in
respect of any Lease Obligation or Lease Claim or any person or entity
liable therefor or any collateral security therefor (including each and
all of the acts, omissions and matters described in SECTION 7.2),
without exonerating UCS, even if any right of subrogation is destroyed,
limited, reduced, affected or impaired thereby.
6.7.4 The subordination provided herein and the rights of the
holders of Lease Obligations and Lease Claims hereunder shall be fully
enforceable as to all Lease Obligations and Lease Claims which are not
allowed, allowable or enforceable in such Bankruptcy, Insolvency or
Liquidation Proceeding (including Post-Petition Claims), even if and
even though no right of subrogation is available in respect of such
Lease Obligations and Lease Claims.
6.7.5 For purposes of enforcing any right of subrogation on
the terms set forth in this SECTION 6.7, no payment or distribution on
account of any Subordinated Claim applied to the performance, discharge
or payment of a Lease Obligation or Lease Claim shall, as between the
UASC and UCS, as a creditor, and to the extent of the payment or
distribution so applied, discharge the liability of UASC and UCS, as
Tenants respectively for the payment of such Lease Obligation and Lease
Claim and, to this end, UASC, as Tenant shall remain obligated to pay
such Lease Obligation and Lease Claim in full despite any such
application.
ARTICLE 7. IMPAIRMENT OF SUBORDINATION
SECTION 7.1 SUBORDINATION NOT PREJUDICED, AFFECTED OR IMPAIRED.
No right of any present or future holder of any Lease
Obligation and Lease Claim to enforce subordination as provided in this
Agreement shall at any time in any way be prejudiced, affected or impaired by
any act or failure to act on the part of UASC, UCS or any party to the
Collateral Agreements or by any act or
9
failure to act on the part of the Landlord or any holder of Lease Obligations
and Lease Claims or by any breach or default by UASC, in the performance or
observance of any promise, covenant or obligation enforceable by the Landlord or
UCS, regardless of any knowledge thereof that any holder of Lease Claims may
have or otherwise be charged with.
SECTION 7.2 ACTIONS BY LANDLORD.
Without in any way limiting the generality of the foregoing,
the Landlord and each holder of any Lease Obligations or Lease Claim may at any
time and from time to time, without the consent of or notice to UCS, as a
creditor, without incurring any responsibility or liability to UCS and without
in any manner prejudicing, affecting or impairing the subordination provided
herein or the obligations of UCS under this Agreement:
7.2.1 Make loans and advances to UASC or otherwise extend
credit to UASC, in any amount and on any terms, whether pursuant to a
commitment or as a discretionary advance and whether or not any default
or event of default or failure of condition is then continuing; and,
7.2.2 Change the manner, place or terms of payment or extend
the time of payment of; or, renew or alter, compromise, accelerate,
extend, any Lease Obligations and Lease Claim or any agreement,
guaranty, lien or obligation of UASC or any other person or entity in
any manner related thereto, or otherwise amend, supplement or change in
any manner any Lease Obligations or Lease Claim or any such agreement,
guaranty, lien or obligation; and,
7.2.3 Increase or reduce the amount of any Lease Obligation or
Lease Claim or any amounts payable in respect thereof; and,
7.2.4 Release or discharge any Lease Obligation or Lease Claim
or any guaranty thereof or any agreement or obligation of UASC or any
other person or entity with respect thereto; and,
7.2.5 Take or fail to take any collateral security for any
Lease Obligation or Lease Claim or take or fail to take any action
which may be necessary or appropriate to ensure that any security
interest or lien upon any property securing any Lease Obligation or
Lease Claim is duly enforceable or perfected or entitled to priority as
against any other lien or to ensure that any proceeds of any property
subject to any security interest or lien are applied to the payment of
any Lease Obligation or Lease Claim; and,
7.2.6 Release, discharge or permit the lapse of any or all
security interests or liens upon any property at any time securing any
Lease Obligation or Lease Claim; and,
7.2.7 Exercise or enforce, in any manner, order or sequence,
or fail to exercise or enforce, any right or remedy against UASC or any
collateral security or any other person, entity or property in respect
of any Lease Obligation or Lease Claim or any security interest or lien
securing any Lease Obligation or Lease Claim or any right under this
Agreement, and apply any payment or proceeds of collateral in any order
of application; and,
7.2.8 Sell, exchange, release, foreclose upon, or otherwise
deal with any property that may at any time be subject to any security
interest or lien securing any Lease Obligation or Lease Claim.
SECTION 7.3 DELAY OR FAILURE TO EXERCISE RIGHTS.
No exercise, delay in exercising or failure to exercise any
right arising under this Agreement, no act or omission of any holder of Lease
Obligation or Lease Claim in respect of UASC or any other person or entity or
any collateral security for any Lease Obligation or Lease Claim or any right
arising under this Agreement or the Collateral Agreements, no change,
impairment, or suspension of any right or remedy of any holder of any Lease
Obligation or Lease Claim, and no other act, failure to act, circumstance,
occurrence or event which, but for this provision, would or could act as a
release or exoneration of the obligations of UCS hereunder shall in any way
affect, decrease, diminish or impair any of the obligations of UCS under this
Agreement or give UCS or any other person or entity any recourse or defense
against any holder of a Lease Obligation or Lease Claim in respect of any right
arising under this Agreement.
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SECTION 7.4 REINSTATEMENT OF LEASE CLAIMS AND OBLIGATIONS.
If any payment or other transfer at any time applied to the
payment or satisfaction of any Lease Obligation or Lease Claim is thereafter
rescinded, recovered, set aside, avoided or required to be returned, then such
Lease Obligation or Lease Claim and all rights of the holder of such Lease
Obligation or Lease Claim to enforce subordination as set forth herein shall be
automatically and unconditionally reinstated, as fully as if such payment or
transfer had never been made.
ARTICLE 8. REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 8.1 UASC AND UCS.
During the term of this Agreement and until the full and
complete performance, discharge and payment in full, in cash of all Lease
Obligations and Lease Claims, UASC and UCS hereby represent, warrant, covenant
and agree as set forth in this Article 8.
SECTION 8.2 UASC'S AUTHORITY.
UASC hereby represents and warrants to each present and future
holder of any Lease Obligation or Lease Claim that (a) the Recitals are true and
correct as of the date hereof, (b) it has duly executed and delivered this
Agreement, in compliance with all laws and regulations applicable to it and all
agreements binding upon it, with full power and authority to bind itself and its
successor and assigns, (c) this Agreement is binding upon and legally
enforceable against it and its successor and assigns, and (d) its execution and
delivery of this Agreement, and the performance of its obligations hereunder and
the obligations hereunder, does not violate or conflict with, or constitute a
default under, any law, regulation, agreement or other contractual obligation
binding upon or enforceable against such party.
SECTION 8.3 UCS'S AUTHORITY.
UCS hereby represents and warrants to each present and future
holder of any Lease Obligation or Lease Claim that (a) the Recitals are true and
correct as of the date hereof, (b) it has duly executed and delivered this
Agreement, in compliance with all laws and regulations applicable to it and all
agreements binding upon it, with full power and authority to bind itself and its
successor and assigns, (c) this Agreement is binding upon and legally
enforceable against it and its successor and assigns, and (d) its execution and
delivery of this Agreement, and the performance of its obligations hereunder and
the obligations hereunder, does not violate or conflict with, or constitute a
default under, any law, regulation, agreement or other contractual obligation
binding upon or enforceable against such party.
SECTION 8.4 RESTRICTIONS AS TO SECURITY FOR SUBORDINATED CLAIMS.
UASC agrees that it will not grant or permit to exist, and UCS
will not demand, accept, take, seize, or retain, any security interest or lien
upon any property now owned or hereafter acquired by UASC as security for any
Subordinated Obligation or Subordinated Claim.
SECTION 8.5 RESTRICTIONS RELATING TO THE LEASE AND LEASE COLLATERAL.
No holder of any Subordinated Obligation or Subordinated Claim
will accept or retain the benefit of any agreement in any respect restricting
the right of UASC and UCS, respectively, (a) to incur or repay or secure any
Lease Obligation or Lease Claim in any amount, (b) to enter into, amend,
supplement, or change the Leases or any other agreement governing or relating to
any lease, including, but not limited to any subordination or attornment or
estoppel agreements requested by Landlord with respect to any mortgage or deed
of trust or loan on the Premises, or (c) to sell, transfer or otherwise dispose
of any or all of the capital stock of, or partnership or limited liability
company interests in, or other equity interests in, any Subsidiary or to sell,
transfer or otherwise dispose of any or all of the property or assets of UASC
and UCS, including dispositions by merger or consolidation, except only the
sale, transfer or other disposition of all or substantially all of the assets of
UASC and UCS and their Subsidiaries, taken as a whole.
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SECTION 8.6 AMENDMENT OF ORGANIZATIONAL DOCUMENTS AND MANAGEMENT
AGREEMENT.
UCS will not enter into or accept any agreement to amend,
supplement, terminate or otherwise change the Management Agreement, the
Operating Agreement of UASC or to change its By-laws and Charter, except upon
the prior written consent of the Landlord.
SECTION 8.7 ASSIGNMENT OF SUBORDINATED CLAIMS AND OBLIGATIONS.
Prior to making or agreeing to make any transfer of any
Subordinated Claim or any transfer of any interest in any Subordinated
Obligation or Subordinated Claim, the then holder thereof will (a) deliver a
copy of this Agreement to the transferee, (b) cause the transferee duly to
execute and deliver its agreement to be bound by the provisions hereof, by
execution of a counterpart of the signature page hereto, stating the interest
transferred, and (c) deliver such counterpart, so executed, to the Landlord,
accompanied by, if requested by the Landlord, an opinion of reputable counsel
stating that the execution and delivery of such counterpart is within the power
of such transferee and that such counterpart was duly authorized, executed and
delivered by such transferee and is enforceable against such transferee in
accordance with its terms, subject to laws generally affecting the enforcement
of the rights of creditors and the applicability of general equitable
principles.
ARTICLE 9. LEASE DEFAULT AND ACCELERATION
SECTION 9.1 RIGHT TO CURE.
When Landlord gives UCS, as a creditor, as provided in ARTICLE
5 hereof, a Default Notice, UCS shall have the right, but not the obligation, to
undertake to cure such an Event of Default. If UCS determines to undertake to
cure such Event of Default, it will so notify Landlord within three (3) Business
Days after receipt of Landlord's notice, or it will be deemed to have waived
this right. Landlord may exercise any and all remedies available to it
consistent with the provisions of this Agreement while UCS is considering
whether to cure such Event of Default. If UCS elects to cure such Event of
Default, UCS must cure within ten (10) Business Days of the receipt of such
notice such Event of Default as it exists on the date of cure and not on the
date of the Default Notice delivered to UCS; provided, however, UCS shall have
no obligation to then cure any other Event of Default not stated in the Default
Notice.
SECTION 9.2 ACCELERATION NOTICE.
Upon any acceleration of the Lease Obligations, a written
notice of acceleration (the "Acceleration Notice") shall be given by the
Landlord to UCS within fifteen (15) Business Days (a Business Day for the
purposes of this Agreement being a day that satisfies the definition of Business
Day in the applicable Lease) of such acceleration. Under certain circumstances
specified in such Lease, the Landlord may be entitled to send out Default
Notices and Acceleration Notices simultaneously, and UCS hereby acknowledges
this right.
SECTION 9.3 OWNERSHIP OF SUBORDINATED OBLIGATIONS.
UCS, as creditor, warrants and represents that it has not
previously assigned any interest in the Subordinated Obligations or Subordinated
Claims and that no party other than UCS owns an interest in the Subordinated
Obligations or Subordinated Claims.
ARTICLE 10. SPECIAL USE RESTRICTIONS AND INDEMNIFICATION
SECTION 10.1 AGREEMENT TO OBSERVE.
UCS AS AN OWNER OF UASC SHALL OBSERVE AND PERFORM (AND CAUSE
UASC) TO OBSERVE AND PERFORM IN ALL MATERIAL RESPECTS EACH AND EVERY TERM TO BE
OBSERVED OR PERFORMED BY UASC PURSUANT TO THE TERMS OF THE USE RESTRICTIONS OF
THE ASC LEASE INCLUDING, BUT NOT LIMITED TO (a) THE USE RESTRICTIONS SET FORTH
12
THEREIN WITH RESPECT TO SPECIFIC MEDICAL SERVICES WHICH MAY BE PERFORMED BY
TENANTS; (b) THOSE MEDICAL SERVICES WHICH SHALL NOT BE PERFORMED ON THE
PREMISES, (c) THE REQUIREMENT THAT ALL PERSONS OR ENTITIES RENDERING MEDICAL
SERVICES IN THE PREMISES MUST BE QUALIFIED MEDICAL PROVIDERS (AS DEFINED IN THE
ASC LEASE) AND (d) THE SPECIFIC PROHIBITIONS OF PROVIDING ANY SERVICE INVOLVING
THE ELECTIVE TERMINATION OF A PREGNANCY.
UCS FURTHER ACKNOWLEDGES AND AGREES THAT THE RESTRICTIONS SET
FORTH ABOVE APPLY TO EACH OF UASC'S AND UCS'S RESPECTIVE MEMBERS, OFFICERS,
SHAREHOLDERS, PARTNERS, EMPLOYEES AND AFFILIATES OR ANY OTHER PERSON OR ENTITY
WHICH UASC ALLOWS TO PERFORM MEDICAL SERVICES AND UCS ASSUMES FULL AND COMPLETE
RESPONSIBILITY FOR COMPLIANCE WITH THE FOREGOING RESTRICTIONS UNDER THE ASC
LEASE. IN THE EVENT OF ANY VIOLATION OF ANY OF THE FOREGOING RESTRICTIONS, THEN
UASC AND UCS NOTWITHSTANDING ANY OTHER PROVISION OF THE LEASES OR THIS AGREEMENT
SHALL BE IN IMMEDIATE DEFAULT OF THE APPLICABLE LEASE WHERE SUCH SERVICES ARE
PERFORMED AND UCS SHALL BE IN DEFAULT OF THIS AGREEMENT. UASC and UCS SHALL (AND
UCS SHALL CAUSE UASC) TO IMMEDIATELY CEASE AND DESIST SUCH VIOLATION AND/OR
CAUSE ANY PERSON OR ENTITY CAUSING SUCH VIOLATION TO IMMEDIATELY AND PERMANENTLY
VACATE THE ASC SUITE.
WITHOUT LIMITING ANY OTHER RIGHTS THAT LANDLORD MAY HAVE UNDER
THE LEASE, INCLUDING LANDLORD'S RIGHT OF TERMINATION, LANDLORD SHALL BE ENTITLED
TO EXERCISE ANY AND ALL REMEDIES, AT LAW OR IN EQUITY, TO ENFORCE THE FOREGOING
PROVISIONS OF THE ASC LEASE WITH RESPECT TO THESE USE RESTRICTIONS,THIS SECTION
AND ANY BREACH OR DEFAULT THEREUNDER INCLUDING, WITHOUT LIMITATION, THE RIGHT TO
OBTAIN A TEMPORARY OR PERMANENT INJUNCTION AND/OR SPECIFIC PERFORMANCE BY UASC
AND UCS. SPECIFICALLY, UASC AND UCS ACKNOWLEDGE THAT THE COVENANTS SET FORTH
ABOVE WITH RESPECT TO THE LEASE ARE MATERIAL TO LANDLORD ENTERING INTO THE LEASE
AND THIS AGREEMENT. UASC AND UCS FURTHER ACKNOWLEDGE AND AGREE THAT THE
INTERESTS OF LANDLORD WILL BE IRREPARABLY HARMED AND DAMAGED IN THE EVENT OF A
BREACH OF THE COVENANTS SET FORTH ABOVE. ACCORDINGLY, LANDLORD SHALL BE ENTITLED
TO INJUNCTIVE RELIEF (TEMPORARY AND PERMANENT) AND/OR SPECIFIC PERFORMANCE, OR
OTHER APPROPRIATE EQUITABLE REMEDY, IN CONNECTION WITH ANY BREACH OR THREATENED
BREACH OF THE USE RESTRICTIONS SET FORTH IN THIS SECTION OR IN THE LEASE,
WITHOUT THE NECESSITY OF POSTING BOND OR OTHER SECURITY.
SECTION 10.2 INDEMNIFICATION.
UCS shall, at its sole expense, indemnify, defend and hold
Landlord, any holder of a Subordinated Obligation or Subordinated Claim, and
their respective successors and assigns, and their respective directors,
offices, employees, servants agents, partners, members and shareholders (each,
an "Indemnified Party") harmless from and against and reimburse Landlord, any
holder of a Subordinated Obligation or Subordinated Claim and their respective
successors and assigns with respect to any and all claims, demands, actions,
causes of action, losses, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorney's fees, consultant's fees and court
costs) of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by any Indemnified Party at any time
and from time to time by reason or arising out of any breach or violation of
ARTICLE 10 of this Agreement by UASC, UCS or any physician performing medical
services in the ASC Suite, their affiliates, successors and assigns.
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ARTICLE 11. LIMITED GUARANTY
SECTION 11.1 GUARANTY OF MEMBER.
UCS, as Guarantor, as additional consideration for the
execution of the Leases by Landlord, hereby irrevocably, unconditionally and
absolutely becomes guarantor of the prompt and faithful performance by UASC of
all of the terms, covenants, conditions, agreements and provisions to be kept,
observed and performed by UASC under the ASC Lease, including without
limitation, the payment by UASC of the Rent (as defined in the ASC Lease) and
any and all other sum or sums to become due thereunder, and hereby further
agrees as follows:
11.1.1 Guarantor agrees that (a) this obligation shall be
binding upon Guarantor without any further notice or acceptance hereof;
(b) immediately upon receipt of notice by Guarantor of the occurrence
of a Default (as such term is defined in the Lease or under this
Agreement or the Collateral Agreements), Guarantor will pay to Landlord
the Rent and will keep, observe and perform all the terms, covenants,
conditions, agreements and provisions of the Lease which are to be
kept, observed and performed by UASC under the ASC Lease; (c) no
extension, forbearance or leniency extended by Landlord to UASC shall
discharge Guarantor and Guarantor agrees that it will remain liable
hereunder at all times; (d) Landlord and UASC, may at any time or times
enter into such modifications, extensions, amendments or other
covenants respecting the Lease, and Guarantor shall not be released
thereby, and Guarantor shall then continue as guarantor with respect to
the ASC Lease as so modified, extended, amended or otherwise affected,
provided Guarantor has consented to any and all such modifications,
extensions or amendments; (e) neither Guarantor's obligation to make
payment in accordance with the provisions of this Guaranty nor any
remedy for the enforcement thereof shall be impaired, modified,
changed, released or limited in any manner whatsoever by any
impairment, modification, change, release of limitation of the
liability of UASC or its estate in bankruptcy arising from the
operation of any present or future provision of the Federal Bankruptcy
Code or any other law of the United States or of any state relating to
bankruptcy, insolvency, reorganization, readjustment, receivership or
similar proceeding of any nature whatsoever, or the disaffirmance of
the ASC Lease in any such proceedings or otherwise; and (f) Guarantor
shall continue as guarantor with respect to the ASC Lease upon any
assignment and/or subletting by UASC of any or all of its interests,
in, to and under the ASC Lease or the ASC Suite, whether or not
Guarantor has received notice of or consent to any and all such
assignments and/or sublettings.
11.1.2 Guarantor further agrees to be bound by each and every
term, covenant, condition, agreement, and provision of the Leases, with
the same force and effect as if it were designated in and had executed
the Leases as tenant thereunder. Guarantor hereby acknowledges receipt
and acceptance of a copy of the Leases.
11.1.3 This as an agreement of both guaranty and suretyship.
The liability of Guarantor shall be direct and may be enforced without
Landlord's being required to resort to any other right, remedy, or
security, or to proceed against any other party. Landlord may proceed
against UASC, Guarantor, or other parties in such order as Landlord may
elect without waiving its right to proceed singly, successively, or
cumulatively against Guarantor or any other party.
11.1.4 Guarantor may, at Landlord's option, be joined in any
action or proceeding commenced by Landlord against UASC in connection
with and based upon any terms, covenants, conditions, agreements or
provisions of the ASC Lease. Guarantor waives any demand by Landlord or
prior action by Landlord of any nature whatsoever against UASC,
including without limitation, any right which Guarantor might otherwise
have, under any statute or rule of law, to require Landlord to take any
action against UASC prior to proceeding against Guarantor hereunder.
11.1.5 Guarantor hereby acknowledges that the rights, benefits
and privileges hereunder shall inure to the benefit of each and every
assignee of Landlord and of Landlord's interest in, to and under the
Lease, and that Guarantor shall continue to be bound hereunder upon
such assignment without further documentation.
SECTION 11.2 LIMITATION ON GUARANTY.
The obligations of UCS as Guarantor hereunder shall expire and
be of no further force and effect upon:
11.2.1 The Discharge of the Lease Obligations by UASC and UCS
under the Leases and the Discharge of Lease Obligations by all of the
parties to the Collateral Agreements; or,
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11.2.2 Prior to the Methodist Release Date:
11.2.2.1 Upon UCS's payment to Landlord or any holder
of the Lease Obligations and Lease Claims of
an amount equal to Seventy percent (70%) of
all Lease Obligations and Lease Claims which
are not performed, discharged or paid in
full by UASC under the ASC Lease.
11.2.2.2 Upon UCS's payment to Landlord or any holder
of the Lease Obligations and Lease Claims of
all Lease Obligations and Lease Claims of
UCS under the Corporate Suite Lease and the
Clinic Suite Lease.
11.2.3 From and after the Methodist Release Date:
11.2.3.1 Upon UCS's payment to Landlord or any holder
of the Lease Obligations and Lease Claims of
an amount equal Seventy percent (70%) of all
Lease Obligations and Lease Claims which are
not performed, discharged or paid in full by
UASC under the ASC Lease.
11.2.3.2 Upon UCS's payment to Landlord or any holder
of the Lease Obligations and Lease Claims of
all Lease Obligations and Lease Claims of
UCS under the Corporate Suite Lease and the
Clinic Suite Lease.
11.2.3.3 Provided, however, that the aggregate amount
payable by UCS under SECTION 11.2.3.1 shall
not exceed $2,000,000.
11.2.4 Provided, however that the limitations on Guarantor's
obligations under this ARTICLE 11 shall not be limit or restrict UCS's
obligations under ARTICLE 10.
ARTICLE 12. MISCELLANEOUS
SECTION 12.1 SPECIFIC ENFORCEMENT.
UASC and UCS acknowledge and agree that an action for money
damages is not an adequate remedy for enforcement of this Agreement and,
accordingly, agree that each and all of the obligations arising hereunder may,
at the option of the Landlord, be enforced by an action for specific performance
or other lawful specific or injunctive relief.
SECTION 12.2 POWERS AND AUTHORITIES IRREVOCABLE; NO DUTY.
All rights, powers and authorities herein granted to the
Landlord are coupled with an interest and are irrevocable until Discharge of the
Lease Obligations and Lease Claims and all outstanding Lease Obligations or
Lease Claims have been performed, discharged and paid in full in cash. Such
rights, powers and authorities may be freely exercised by Landlord, or not
exercised by it, in each instance as it may see fit given its own individual
interest as a holder of a Lease Obligation or Lease Claim, without any duty of
care, duty of loyalty or other duty whatsoever to UCS.
SECTION 12.3 ENFORCEABILITY.
This Agreement (a) shall be binding upon and enforceable
against UASC and UCS and their respective successors and assigns whether such
holder of a Subordinated Obligation or Subordinated Claims holds such
Subordinated Claim or Subordinated Obligation as a lien holder, secured party or
otherwise, (b) may be jointly or separately enforced in any lawful manner
against any one or more or all of the persons and entities bound hereby, without
any requirement that other Claims or persons or entities bound hereby be joined
(and no single or partial exercise or enforcement of any right hereunder shall
preclude any other or further exercise or enforcement thereof), and (c) shall
inure to the benefit of and be enforceable by Landlord, its
15
successors and assigns and transferees and each other present and future holder
of any Lease Obligation or Lease Claim. Without limiting the foregoing, Landlord
shall have the right to assign this Agreement to any Lender of Landlord with
respect to the Leases and UCS hereby agrees to provide such estoppel
certificates to such Lender as may be required and necessary with respect to the
right of the Lender to the benefits of this Agreement.
SECTION 12.4 COMPLETE AGREEMENT; INCONSISTENCY; MODIFICATION; WAIVER.
This Agreement, the Leases, and the Collateral Agreements set
forth definitely and exhaustively the complete agreement of the parties with
respect to the subject matter hereof. No provision hereof and no right arising
hereunder may be modified or waived by any oral agreement or shall be deemed to
have been modified or waived by any act or failure to act or shall otherwise be
affected or changed, except as and to the extent expressly set forth in a
writing signed by the party to be bound thereby.
SECTION 12.5 HEADINGS.
The paragraph headings herein are inserted solely for
convenience of reference and shall not be used to construe, interpret, define,
or limit the provisions hereof.
SECTION 12.6 GOVERNING LAW; CONSENT TO JURISDICTION.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Tennessee. UASC and UCS hereby (a)
irrevocably consents to the exclusive jurisdiction of the courts of the County
of Davidson in the State of Tennessee or the courts of the United States for the
Middle District of Tennessee in respect of any action or proceeding arising out
of or in connection with this Agreement or for the enforcement of any right
hereunder, (b) waives any objection which it may have at any time to the laying
of venue of any such action or proceeding in any such court, waives any claim
that such action or proceeding has been brought in an inconvenient forum, and
further waives the right to object that such court does not have jurisdiction
over such party, and (c) agrees that process in any such action or proceeding
may be served upon it, and shall be sufficiently served upon it, by mail to its
address set out on the signature pages hereof; without limiting the right of any
person or entity to serve process in any other manner permitted by law.
SECTION 12.7 WAIVER OF RIGHT TO TRIAL BY JURY.
Each party hereto hereby waives, absolutely, unconditionally,
irrevocably and forever, any right to trial by jury in any action or proceeding
arising out of or in connection with this Agreement or for the enforcement of
any right hereunder.
SECTION 12.8 CONTINUING AND IRREVOCABLE AGREEMENT; ACCEPTANCE.
This Agreement is a continuing and irrevocable agreement
enforceable against each signatory party hereto by Landlord and each other
present and future holder of any Lease Obligation or Lease Claim. Notice of
acceptance hereof by Landlord or any such holder is hereby waived, and reliance
hereon by each of them is hereby unconditionally and conclusively acknowledged.
SECTION 12.9 COUNTERPARTS.
This Agreement may be executed in any number of counterparts
and by the parties on one or more counterparts, all of which taken together
shall constitute a single agreement. Delivery of an executed signature page to
this Agreement by facsimile shall be effective as delivery of a manually signed
counterpart.
SECTION 12.10 NOTICES.
All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been given when
actually delivered, if personally delivered, or when mailed, if mailed by
registered or certified mail, return receipt requested, to the following
addresses or to such other address as either party may subsequently designate in
writing:
16
12.10.1 If to Landlord:
Brierbrook Properties, LLC
c/o Med Properties Asset Group, L.L.C.
Attn: ▇.▇. ▇▇▇▇▇▇, Chief Manager
Suite 250 (Suite)
7101 Executive Center Drive (Street)
Brentwood, Tn. 37027 (City, State, zip)
(▇▇▇)-▇▇▇-▇▇▇▇ (phone)
(▇▇▇) ▇▇▇-▇▇▇▇ (fax)
▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
12.10.2 With a copy given in the manner prescribed above,
to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Suite 1500
2525 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ (phone)
▇▇▇-▇▇▇-▇▇▇▇ (fax)
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ (email)
12.10.3 If to UCS:
UROLOGY CENTER OF THE SOUTH, P.C.
c\o ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Administrator
Suite 220
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
12.10.4 With a copy given in the manner prescribed above,
to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Stokes, Bartholomew, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
12.10.5 If to UASC:
Urology Ambulatory Surgery Center, L.L.C.
(c/o)
---------------------------------
(Suite)
---------------------------------
(Street)
---------------------------------
(City, State, zip)
---------------------------------
(phone)
---------------------------------
(fax)
----------------------------------
(email)
----------------------------------
17
12.10.6 With a copy given in the manner prescribed above,
to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Stokes, Bartholomew, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[SIGNATURE PAGE FOLLOWS]
18
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered as of the day and year first above stated.
LANDLORD:
BRIERBROOK PARTNERS, LLC
a Tennessee limited liability company
By: MED PROPERTIES ASSET GROUP, L.L.C.,
an Indiana limited liability company
Its Managing Member
By: /s/ ▇.▇. ▇▇▇▇▇▇
-------------------------------------
Title: Chief Manager
----------------------------------
UCS:
UROLOGY CENTER OF THE SOUTH, P.C.
a Tennessee professional corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: President
----------------------------------
UASC
UROLOGY AMBULATORY SURGERY CENTER, L.L.C.
a Tennessee limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Chief Manager
-----------------------------------------
Its Managing Member
By:
---------------------------------------
Title:
------------------------------------
19
STATE OF TENNESSEE
COUNTY OF DAVIDSON
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that ▇.▇. ▇▇▇▇▇▇, whose name as Chief Manager of Med
Properties Asset Group, L.L.C., an Indiana limited liability company, in its
capacity as Managing Member of Brierbrook Partners, LLC, a Tennessee limited
liability company, is signed to the foregoing instrument, and who is known to
me, acknowledged before me on this day that, being informed of the contents of
said instrument, he, as such Chief Manager and with full authority, executed the
same voluntarily for and as the act of said limited liability company, in its
capacity as Managing Member as aforesaid.
Given under my hand and official seal, this the 20th day of June, 2001.
/s/ (SEAL)
-------------------------------
Notary Public
My Commission Expires:
---------
20
STATE OF TENNESSEE
COUNTY OF SHELBY
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, whose name as President of
Urology Center of the South, P.C., a Tennessee professional corporation, is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day that, being informed of the contents of said instrument, he/she,
as such President and with full authority,999 executed the same voluntarily for
and as the act of said professional corporation, in his/her capacity as
President as aforesaid.
Given under my hand and official seal, this the 26th day of June, 2001.
/s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (SEAL)
-----------------------------------
Notary Public
My Commission Expires: FEB 26, 2001
21
STATE OF TENNESSEE
COUNTY OF SHELBY
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ whose name as Chief Manager of
Urology Ambulatory Surgery Center, L.L.C., a Tennessee limited liability
company, is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said
instrument, he/she, as such Chief Manager and with full authority, executed the
same voluntarily for and as the act of said limited liability company, in
his/her capacity as Chief Manager as aforesaid.
Given under my hand and official seal, this the 26th day of June,
2001.
/s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Notary Public
22
EXHIBIT A
ASC LEASE
A
SEE ASC
AMENDED AND RESTATED LEASE AGREEMENT
EXHIBIT B
CORPORATE SUITE LEASE
B
SEE UCS
CORPORATE OFFICE LEASE AGREEMENT
EXHIBIT C
CLINIC LEASE
C
SEE UCS
CLINIC LEASE AGREEMENT
